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Public employers who switch from pensions to defined-contribution retirement plans would likely attract workers who aren't as committed to the employer and who are less willing to learn skills that they can't transfer to another job, a study says. The National Institute on Retirement Security study also found that switching from a pension to another retirement plan would boost worker turnover.

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Now that returns on investments are in the double digits, many public pension funds are finding they can start narrowing funding gaps and implementing reforms. The 20% stock market gain over the past 12 months is putting many state and municipal pension funds on a stronger financial footing. Some funds have scaled back benefits for new employees and increased their contributions to the pension funds.

Sen. Orrin Hatch, R-Utah, is among the lawmakers who want to overhaul public pension funds by transferring the funds' obligations to annuities backed by insurance companies. Employers would pay premiums to the annuity carriers rather than into their own pension plans.

Despite its desire to stop paying into the California Public Employees' Retirement System because of rising costs, the San Jose City Council cannot afford a termination fee of as much as $5.7 million. The council voted unanimously last year to look into ending CalPERS payments. While newly elected councilors and general city workers pay into non-CalPERS pension funds, the city still has about 30 current and former councilors who subscribe to CalPERS.

Some Americans will not get the Social Security benefits they may have been expecting because of a rule adopted in 1983. Workers who were eligible for a government pension and were hired before 1984 are subject to a provision that prevents them from getting both the pension and full Social Security benefits. The so-called Windfall Elimination Provision lowers the benefits amount for those who were not subject to payroll tax.

Illinois lawmakers have revealed a proposal to address a $96 billion pension shortfall by increasing costs for workers, raising the retirement age and placing a cap on pensionable salaries. Unions representing public workers said they will sue if the plan is approved.